Why Barclays PLC (ADR) (BCS), Micron Technology, Inc. (MU) and Ryanair Holdings plc (ADR) (RYAAY) Are 3 of Today’s Worst Stocks

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Having had a weekend to sleep on it, the bears didn’t change their mind about the negative impact a Brexit vote will have on the global economy. The S&P 500 lost 1.81% of its value today, closing at 2,000.54 … its lowest close since mid-March.

Why Barclays PLC (ADR) (BCS), Micron Technology, Inc. (MU) and Ryanair Holdings plc (ADR) (RYAAY) Are 3 of Today's Worst StocksLeading the way were Barclays PLC (ADR) (NYSE:BCS), Micron Technology, Inc. (NASDAQ:MU) and Ryanair Holdings plc (ADR) (NASDAQ:RYAAY), though each fell for unsurprising reasons.

Barclays PLC (ADR) (BCS)

It was hardly alone at the bottom of the barrel on Monday; other British banks like Lloyds Banking Group PLC (ADR) (NYSE:LYG) and Royal Bank of Scotland Group PLC (NYSE:RBS) were also deep in the red. But, Barclays led the way with a jaw-dropping 21% plunge on Monday. Coupled with Friday’s setback, BCS shares have lost 34% since Thursday’s close.

There’s little doubt as to the cause … Brexit. Between currency fluctuations and the operational burden imposed on the likes of Barclays and Lloyds when they’re no longer part of the European Union, the market is concerned earnings for these banks will suffer. Today’s leg of the selloff, however, was explicitly inspired by downgrades of most of these names.

Analysts from Jefferies commented:

“[The Brexit] changes everything about Barclays’s investment proposition … [the] structure, profitability and, indeed, existence of Barclays’s investment bank are called into question … the U.K. referendum is likely to require an expensive reshape of the investment bank.”

Jefferies went on to cut its rating on BCS to an underperform.

Micron Technology, Inc. (MU)

Although the ripple effect was the core reason Micron Technology shareholders become yet another Brexit victim on Monday, that wasn’t the biggest reason MU shares lost another 7% of their value. Rather, the market was reminded of persistent tepidness in DRAM demand today.

Still, there are a few optimists out there. MKM Partners analyst Ian Ing explains of the stabilizing supply and demand dynamic:

“In DRAM (54% of last quarter sales), competitors Samsung and Hynix have been highly disciplined at lowering DRAM CapEx spending this year, supported by public communications and semi equipment data points. Investors are hoping that initial signs of price stabilization hold, as MU plans to outship CY16 industry bit growth (low 20s). MU’s long-awaited ramp of 20nm output coincides well with seasonal demand in computing (mid-20s % of February quarter DRAM) and mobile (low-20s).”

Ryanair Holdings plc (ADR) (RYAAY)

Last but not least, the aftershock of Brexit wasn’t limited to Britain’s biggest banks. On this second day of trading following the shocking news, airlines continued to struggle and the U.K.’s airlines in particular.

Case in point? Ireland’s Ryanair Holdings plc lost 14% of its value on Monday. The market is assuming the same double-whammy that up-ended banks will also prove to be a headwind for RYAAY … a weak British pound, and the potential economic malaise that could be put into place by Britain’s breakup with the EU. Airfares are already notably lower since Thursday, though the company says bookings haven’t slowed yet.

It wasn’t just the United Kingdom’s airlines that continued to be hit hard by the fallout of the Brexit, however. United Continental Holdings Inc (NYSE:UAL) led the domestic airline bearish charge, giving up more than 8% of its value today.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/06/why-barclays-plc-adr-bcs-micron-technology-inc-mu-and-ryanair-holdings-plc-adr-ryaay-are-3-of-todays-worst-stocks/.

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